Pre-Schools and Nurseries

21 April - 1pm

Dear Friends

Pre-schools and nurseries are continuing to receive funding through the voucher scheme for free early education entitlements. Grants and other funding are also continuing to be provided for special needs children.

This means that any loss of income for pre-schools and nurseries will be limited to privately paid fees and any other fund-raising activities. It also has an effect on funding for staff on furlough.

The Department for Education provide clarification at the end of last week on the use of furlough by pre-schools and nurseries. This states that funds for staff on furlough cannot be claimed where other government/council funding is still being received. Attached is an extract from the Government guidance.

The guidance means that most pre-schools and nurseries will only be able to make limited use of the funding for furlough but they will continue to be receiving most of their income.

Where churches run their own pre-schools or nurseries then they will need to take account of the above guidance. Staff can still be furloughed only if funding is not received and you will need to ensure they are paid either in full or at least 80% of pay in accordance with the arrangements you have put in place with furloughed staff..

Where churches have let their premises to pre-schools and nurseries then the organisations should be able to maintain rent payments where formal lease arrangements are in place or where the premises are still in use for providing care for key workers’ children or those with special needs. Where there is no formal lease and where the pre-school or nursery is closed churches may want to take account that funding is still being received and there may well be scope to negotiate some form of retainer for the premises so that the pre-school or nursery can be assured that the premises will be open again after the lock down.

Pre-Schools and Nurseries will also be getting their own guidance from the Early Years Alliance.

This section will be relevant to early years providers that are employers, and that usually have a mix of public income (largely this will be funding for the free early education entitlements, also known as ‘DSG funding’) and private income (largely this will be the fees that parents pay for childcare beyond the free entitlements).

Childminders are less likely to be employers, and therefore are less likely to be eligible for support via the CJRS. Childminders may find the Self Employment Income Support Scheme more relevant. Maintained nursery schools should take account of the guidance in this section. For school-based nursery provision, please refer to the ‘schools’ section below.

On 17 March 2020, the Chancellor confirmed that the government will continue to pay local authorities for free early years entitlement places for 2, 3 and 4 year olds to support providers at this time. On 18 March 2020, the government also announced a business rates holiday for many nurseries in England for the 2020 to 2021 tax year. Read the guidance.

Early years settings should remain open where they are needed to provide childcare for the children of critical workers who cannot be cared for safely at home, and vulnerable children.

A private provider should only furlough employees, and therefore seek support through the Coronavirus Job Retention Scheme, if they meet the following conditions:

the employee works in an area of business where services are temporarily not required and where their salary is not covered by public funding

the employee would otherwise be made redundant or laid off

the employee is not involved in delivering provision that has already been funded (free entitlement funding)

(where appropriate) the employee is not required to deliver provision for a child of a critical worker and/or vulnerable child

the grant from the Coronavirus Job Retention Scheme would not duplicate other public grants received, and would not lead to financial reserves being created

If it is difficult to distinguish whether staff are funded through free entitlement or private income for the purposes of meeting the first 3 conditions as listed above, then an early years provider can access the CJRS to cover up to the proportion of its paybill which could be considered to have been paid for from that provider’s private income. This would typically be income received from ‘parent-paid’ hours, and excludes all income from the government’s free entitlements (or ‘DSG income’) for all age groups. In line with the conditions of the scheme listed above, providers should initially use the month of February 2020 to represent their usual income in calculating the proportion of its paybill eligible to be covered by the scheme. Providers should adjust these proportions in subsequent furloughing applications if their income from the government’s free entitlements changes, but are not expected to make any adjustments in relation to changes in parent-paid income.

To illustrate:

If a provider’s average monthly income is 40% from DSG and 60% from other income, the provider could claim CJRS support for up to 60% of their paybill.

This would be done by furloughing staff whose usual salary / combined salaries come to no greater than 60% of the provider’s total paybill.

These proportions could change in subsequent furlough applications as a result of DSG income changing (but not where income from parents increased or decreased). For example, if this provider subsequently receives additional DSG income from a local authority as a result of providing additional hours of childcare, such that its new DSG income would represent 55% of its total income in February 2020, then its maximum use of the furlough scheme should, from that point, be reduced to 45% of its paybill.

The DfE is considering appropriate measures to monitor the use of these schemes in order to detect any duplication of funding, and will be considering potential options to recover misused public funding as required.

We are all aware that we are in extremely unusual times and there is much uncertainty about the future. The closing of our church buildings has had a major impact on our life together and presented challenges to how we operate as a church.